According to a recent study, the gambling industry in the UK has had a significant impact on the economy. The study found that the value of goods and services produced in the gambling sector, known as GVA, has grown at a much faster rate than the overall UK economy. Since 2010, gambling GVA has increased by 45%, compared to 18% for the UK economy as a whole. This means that gambling now contributes 0.4% to the UK’s economic output.
In terms of taxation, the gambling sector paid a total of £4.3bn in taxes in 2019, which made up 0.6% of the UK central government’s revenue. It is also worth noting that the growth of the gambling industry over the past decade has been heavily influenced by the rise of online gambling. Online gambling now accounts for 12% of the industry’s yield, compared to just 12% in 2010.
While the gambling industry still employs a significant number of people, with 85,000 individuals working in the sector in 2019, there has been a decline in employment due to the shift to online gambling. In 2010, there were 93,000 people employed in gambling. The study also highlights the potential impact of regulatory reforms on gambling expenditure. If problem gambling is successfully curbed through these reforms, it is predicted that there could be a decline in gambling spend of 10%. However, this could lead to increased spending in other sectors such as retail, resulting in a higher overall GVA, an increase of 24,000 jobs outside of the gambling industry, and a £171m rise in tax revenue for the government.
The study concludes that while gambling does contribute significantly to the UK economy, it is unlikely that this contribution is additional to what would have occurred if gambling did not exist. The study suggests that reduced rates of problem gambling and subsequent reductions in gambling expenditure could actually have a net economic benefit, as households would instead spend money in other sectors with higher economic multipliers.
Based on these findings, the study recommends that the government commission an urgent review of the social and economic costs of gambling to ensure future regulation is based on accurate and detailed evidence. This should be done alongside the already-planned Gambling Act Review. It is important that any decisions regarding legislative changes are made after considering the economic and social costs associated with each policy change.
In response to the study, the chief executive of the Betting and Gaming Council criticized some of the suggestions, arguing that decisions should be based on hard data and not “fantasy figures”. He highlighted the significant number of people who enjoy gambling in the UK, the industry’s contribution to the economy (£8.7bn in gross value added), and the number of people employed in the sector (over 100,000). He also warned against restricting gambling in the regulated industry, as it could lead to an increase in unlicensed and unsafe gambling activities in the black market, which would have negative consequences for the economy.
The previous report published by the SMF in August 2020 suggested implementing a £100 monthly “soft cap” on deposits, after which affordability checks would be required for further spending. This proposal was included in the Gambling Commission’s consultation on remote customer interaction.
